Nuts! People face shelling out more for peanuts as supplies dwindle

HIGH Street shoppers could soon have to shell out more for their favourite peanuts, according to a new report.

Shoppers may have to shell out more for their peanuts as supply from Argentina tightens

For the latest research shows that UK food manufacturers are facing soaring peanut prices as tightening supply from Argentina piles pressure on a market already hit by global supply problems.

Trade magazine The Grocer reported that harvest-related issues have pushed peanut prices up by 30per cent since March in Argentina which accounts for 25 per cent of global peanut exports and is one of the largest suppliers to the European market alongside the US and China.

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Production issues in India and drought in South Africa have also been a problem, with weakening sterling following June's Brexit vote putting further upward pressure on prices in the UK

Jara Zicha

The magazine said that this year's production in Argentina has been estimated by Cordoba Grain Exchange at 928,000 tons – down 22 per cent year on year – following a decrease in planted area and a decline in yields due to adverse weather during the harvest.

The reduction in planted area is a result of falling prices, prompting farmers to switch to more profitable crops such as corn, according to commodities analyst Mintec.

Prior to the latest increase, Argentine peanut prices were down 12 per cent year on year and 14 per cent below the 10-year average.

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Argentina accounts for 25 per cent of global peanut exports

Market analyst Jara Zicha of Mintec told The Grocer that concerns over lower production in Argentina intensified during the harvest earlier this year.

Moe than 47,000 hectares – 14 per cent of the total – were abandoned due to unseasonably heavy rains from April to June, delaying harvest in the main growing regions of Cordoba, La Pampa and San Luis.

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Weakening sterling following June's Brexit vote could contribute to the pressure on prices

Initially estimated at a million tons in April, production was revised down 9 per cent in August.